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The most popular tax in Europe? Lessons from the Irish plastic bags levy

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  • Frank Convery
  • Simon McDonnell

    ()

  • Susana Ferreira

Abstract

There have been occasional ad hoc efforts to influence consumer behaviour by the imposition of product taxes that reflect external costs imposed by such products that are not initially included in their price. In the spirit of this idea, in 2002 Ireland introduced a 15 Euro cent tax on plastic shopping bags, previously provided free of charge to customers at points of sale. The effect of the tax on the use of plastic bags in retail outlets has been dramatic—a reduction in use in the order of 90%, and an associated gain in the form of reduced littering and negative landscape effects. Costs of administration have been very low, amounting to about 3% of revenues, because it was possible to integrate reporting and collection into existing Value Added Tax reporting systems. Response from the main stakeholders: the public and the retail industry, has been overwhelmingly positive. Central to this acceptance has been a policy of extensive consultation with these stakeholders. The fact that a product tax can influence consumer behaviour significantly will be of interest to many policymakers in this area. This paper analyses the plastic bag levy success story and provides insights and general guidelines for other jurisdictions planning similar proposals. Copyright Springer Science+Business Media, Inc. 2007

Suggested Citation

  • Frank Convery & Simon McDonnell & Susana Ferreira, 2007. "The most popular tax in Europe? Lessons from the Irish plastic bags levy," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 38(1), pages 1-11, September.
  • Handle: RePEc:kap:enreec:v:38:y:2007:i:1:p:1-11
    DOI: 10.1007/s10640-006-9059-2
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    References listed on IDEAS

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    Cited by:

    1. Doreen Fedrigo-Fazio & Jean-Pierre Schweitzer & Patrick ten Brink & Leonardo Mazza & Alison Ratliff & Emma Watkins, 2016. "Evidence of Absolute Decoupling from Real World Policy Mixes in Europe," Sustainability, MDPI, Open Access Journal, vol. 8(6), pages 1-22, May.
    2. repec:spr:endesu:v:19:y:2017:i:4:d:10.1007_s10668-016-9791-x is not listed on IDEAS
    3. Steven M. Smith, 2017. "Economic Incentives and Conservation: Crowding-in Social Norms in a Groundwater Commons," Working Papers 2017-08, Colorado School of Mines, Division of Economics and Business.
    4. Jason Delaney & Sarah Jacobson, 2016. "Payments or Persuasion: Common Pool Resource Management with Price and Non-price Measures," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 65(4), pages 747-772, December.
    5. Sebastián J. Miller & Mauricio A. Vela, 2013. "Are Environmentally Related Taxes Effective?," IDB Publications (Working Papers) 4685, Inter-American Development Bank.
    6. Johane Dikgang & Martine Visser, 2012. "Behavioural Response To Plastic Bag Legislation In Botswana," South African Journal of Economics, Economic Society of South Africa, vol. 80(1), pages 123-133, March.
    7. Flora Budianto & Jana Lippelt, 2010. "Kurz zum Klima: Plastiktüten - nicht länger tragbar," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 63(14), pages 41-43, July.
    8. Norton, D. & Hynes, S., 2014. "A Choice Experiment Approach to assess the costs of degradation as specified by the EU Marine Strategy Framework Directive," Working Papers 186382, Socio-Economic Marine Research Unit, National University of Ireland, Galway.
    9. Benno Torgler & Maria A. Garcia-Valinas & Alison Macintyre, 2012. "Justifiability of Littering: An Empirical Investigation," Environmental Values, White Horse Press, vol. 21(2), pages 209-231, May.
    10. Romaniuc Rustam, 2016. "What Makes Law to Change Behavior? An Experimental Study," Review of Law & Economics, De Gruyter, vol. 12(2), pages 447-475, July.
    11. Taylor, Rebecca & Villas-Boas, Sofia B., 2015. "Bans versus Fees: Disposable Carryout Bag Policies and Bag Usage," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 204783, Agricultural and Applied Economics Association;Western Agricultural Economics Association.
    12. Cherry, Todd L. & Kallbekken, Steffen & Kroll, Stephan, 2014. "The impact of trial runs on the acceptability of environmental taxes: Experimental evidence," Resource and Energy Economics, Elsevier, vol. 38(C), pages 84-95.
    13. Shaun Larcom & Luca A. Panzone & Timothy Swanson, 2017. "Follow-the-leader? Measuring the internalisation of law," CIES Research Paper series 50-2017, Centre for International Environmental Studies, The Graduate Institute.
    14. Harald SCHOENBERGER & David STYLES & Jose Luis GALVEZ MARTOS, 2013. "Best Environmental Management Practice in the Retail Trade Sector," JRC Working Papers JRC76036, Joint Research Centre (Seville site).
    15. Friedrich, Laura A. & Jefferson, Rebecca & Glegg, Gillian, 2014. "Public perceptions of sharks: Gathering support for shark conservation," Marine Policy, Elsevier, vol. 47(C), pages 1-7.
    16. Don Fullerton & Andrew Leicester & Stephen Smith, 2008. "Environmental Taxes," NBER Working Papers 14197, National Bureau of Economic Research, Inc.
    17. Tatiana A. Homonoff, 2013. "Can Small Incentives Have Large Effects? The Impact of Taxes versus Bonuses on Disposable Bag Use," Working Papers 1483, Princeton University, Department of Economics, Industrial Relations Section..

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